Ramsey prices, average cost prices and price sustainability

Leonard J. Mirman*, Yair Tauman, Israel Zang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.

Original languageEnglish
Pages (from-to)123-140
Number of pages18
JournalInternational Journal of Industrial Organization
Issue number2
StatePublished - Jun 1986


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